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Incorrect Revenue advice costs farmers.

Clarification of tax rules for harvest workers after pressure from the National Farmers Union is set to save farmers and growers up to #300,000 each, Accountancy Age has learned.

The Inland Revenue was forced to clarify the tax situation after the NFU protested that tax offices were applying PAYE incorrectly.

Many producers, particularly in the horticulture sector, faced substantial tax bills for their casual workers because tax offices were applying normal PAYE rules instead of daily harvest casual arrangements. Terry Donaldson, chief taxation adviser at the NFU, said: ‘We wrote to (the Inland Revenue) head office saying it was wrong.’

Some NFU members faced bills of #300,000 because of the misinterpretation adding to economic pressure for the sector which has already led to anti-government protests (including one from March involving fake blood, above).

The daily harvest casual arrangement states that normal PAYE rules do not apply to workers who are employed in harvest operations, taken on for a period of one day, and who finish at the end of that day paid off in cash with no contract for further employment. An Inland Revenue spokesman confirmed the validity of these arrangements.

Richard Shaw, of Worcester firm Rabjohns said: ‘Clarification of the rules for taxing casual workers will save thousands of pounds for farmers and growers.’